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Sandeep Ahuja & Co.

Established in the year 1986, we are a leading chartered accountancy firm based in Delhi & NCR rendering comprehensive professional services which include statutory audit, internal audit, direct tax, transfer pricing, GST, bank audit, propriety audit, cost accounting, internal financial controls and risk advisory.

Friday, March 15, 2013

Budget 2013-14: Amendment in Custom Duty

AMENDMENTS IN THE
CUSTOMS ACT, 1962:

1) Clause (n) of
sub-section (2) of section 11 is being amended to include “designs and
geographical indications” so as to provide for protection of these rights.
[Clause 54]

2) Section 27 is being
amended to provide that if the amount of refund claimed is less than rupees
hundred, the same shall not be refunded. [Clause 55]

3) Section 28 is being
amended to provide that show cause notice will not be served where the amount
demanded is less than rupees one hundred. [Clause 56]

4) Section 28BA is being
amended to provide for provisional attachment of property belonging to any
person to whom notice under sub-section (4) of section 28 has been served.
[Clause 57]

5) Clause (a) of section
28E is being substituted so as to include any new business of import or export
proposed to be undertaken by the existing importer or exporter within the
meaning of “activity”. [Clause 58]

6) Section 29 is being
amended to empower the Board to permit landing of vessels and aircrafts at any
place other than customs port or customs airport. [Clause 59]

7) Section 30 is being
amended to provide for electronic filing of import manifest and also to provide
that the Commissioner of Customs may, in cases where it is not feasible to
deliver the import manifest by presenting electronically, allow the same to be
delivered in any other manner. [Clause 60]

8) Section 41 is being
amended to provide for electronic filing of export manifest and also to provide
that the Commissioner of Customs may, in cases where it is not feasible to
deliver the export manifest by presenting electronically, allow the same to be
delivered in any other manner. [Clause 61]

9) Sub-section (2) of
section 47 is being amended to reduce the interest free period for payment of
import duty from five days to two days. [Clause 62]

10) Section 49 is being
amended to restrict the period of storage of imported goods, pending clearance,
in a public or private warehouse to thirty days and to provide that the
Commissioner of Customs may extend the period of storage for further period not
exceeding thirty days at a time. [Clause 63]

11) Section 69 is being
substituted to provide that any warehoused goods may be exported to a place
outside India without payment of import duty if a shipping bill or a bill of
export in prescribed form or label or declaration accompanying the goods as
referred to in section 82 has been presented in respect of such goods. [Clause
64]

12) Under the existing
sub-section (6) of section 104, all offences under the Act are bailable.
Sub-section (6) is being substituted with sub-section (6) and (7). Sub-section
(6) provides that the following specified offences punishable under section 135
shall be non-bailable, namely:-

(a) evasion or attempted
evasion of duty exceeding Rs.50 lakh;

(b) prohibited goods
notified under section 11 which are also notified under sub-clause (C) of
clause (i) of sub-section (1) of section 135;

(c) import or export of
any goods which have not been declared in accordance with the provisions of
this Act and the market price of which exceeds Rs. 1 crore;

(d) Fraudulently
availing of or attempt to avail of drawback or any exemption from duty provided
under this Act, if the amount of drawback or exemption from duty exceeds Rs.50
lakh.

Sub-section (7) provides
that all other offences except those specified in sub-section (6) shall be
bailable. [Clause 65]

13) A proviso is being
inserted in sub-section (2A) of section 129B to provide that in cases where the
delay in disposing of the appeal is not attributable to the appellant, the
Tribunal may extend the period of stay by a period not exceeding 185 days
subject to the condition that if the appeal is not disposed of within the
total period of 365 days from the date of order, the stay order shall stand
vacated. [Clause 66]

14) Section 129C is
being amended to enhance the monetary limit of the Single Bench of the Tribunal
to hear and dispose of appeals from Rs.10 lakh to Rs.50 lakh. [Clause 67]

15) In sub-clauses (B)
and (D) of clause (i) of section 135(1), the threshold limit for punishment in
an offence relating to evasion or attempted evasion of duty or fraudulently
availing of or attempting to avail of drawback or any exemption from duty in
connection with export of goods, has been increased from Rs.30 lakh to Rs.50
lakh. [Clause 68]

16) A new clause (d) is
being inserted in section 142 to provide (i) for recovery of money due to the
Central Government from any other person other than the defaulter after giving
such other person a notice in writing, (ii) that the person to whom such notice
has been issued shall be bound to comply, and (iii) that if the person to whom
the notice is issued fails to comply, he shall be deemed to be a defaulter in
respect of the amount specified in the notice. [Clause 69]

17) Section 143A is
being omitted. [Clause 70]

18) Sub-section (3) of
section 144 is being amended to remove the duty liability on any sample of
goods which is consumed or destroyed during the course of testing or
examination. [Clause 71]

19) Section 146 is being
substituted to change the nomenclature of “customs house agents” to “customs
brokers” considering the global practice and internationally accepted
nomenclature. [Clause 72]

20) Section 146A is
being amended so as to:

(a) substitute the
phrase “customs house agent” with the phrase “customs broker”;

(b) include any offence
committed under the Finance Act, 1994 as a disqualification for person to act
as an authorized representative in customs matters. [Clause 73]

21) Sub-section (3) of
section 147 is being amended to expand the scope of the liability of agents of
the owner, importer or exporter of any goods. [Clause 74]

22) Full exemption from
export duty is being given retrospectively on flat rolled products of iron or
non-alloy steel, plated or coated with zinc falling under headings 7210 and
7212 vide notification No. 27/2011-Customs, dated 01 .03.2011 from 01.03.2011.
[Clause 75]

(d) enhance the tariff
rate against items under heading 8703 from 100% to 125%.

(e) enhance the tariff
rate against items under heading 8903 from 10% to 25%. [Clause 76]

2) The Second Schedule
is being amended as follows:

(a) to substitute the
entry in column (2) against Sl. No. 43, with the entry “7210, 7212″,
retrospectively with effect from 01 .03.2011.

(b) Entry 9A is being
inserted to prescribe a tariff rate of export duty of 20% on raw sugar, white
or refined sugar under heading 1701. However, no export duty is proposed to be
levied presently.

(c) Entries 23A and 23B
are being inserted to prescribe a tariff rate of export duty of 30% on Bauxite
(natural), not calcined and Bauxite (natural), calcined under heading tariff
items 26060010 and 26060020 respectively. Effective rate is being prescribed at
10%

(d) Entries 24A and 24B
are being inserted to prescribe a tariff rate of export duty of 30% on
Ilmenite, unprocessed and Ilmenite, upgraded (beneficiated Ilmenite including
Ilmenite ground) under heading tariff items 26140010 and 26140020 respectively.
Effective rate is being prescribed on unprocessed Ilmenite at 10% and on
upgraded Ilminite at 5%.

The changes at para 1)
and 2) (b), (c), (d) will come into effect immediately owing to a declaration
under the Provisional Collection of Taxes Act, 1931. [Clause 77]

CUSTOMS

A. General

1) Baggage Rules are
being amended to,-

(i) raise the duty free
allowance in respect of jewellery for an Indian passenger who has been residing
abroad for over one year or a person who is transferring his residence to India
from Rs.10,000 to Rs.50,000 in case of a gentleman passenger and from Rs.20,000
to Rs.1 ,00,000 in case of a lady passenger.

(ii) raise the duty free
allowance for crew member of vessel/aircraft from Rs.600 to Rs.1500.

B. Proposals involving
changes in rates of duty

I. AGRICULTURE/AGRO
PROCESSING/PLANTATION SECTOR:

1) Basic customs duty on
dehulled oat grain is being reduced from 30% to 15%.

2) Basic customs duty on
hazel nuts is being reduced from 30% to 10%. 3) Export duty of 10% on de-oiled
rice bran oil cake is being withdrawn.

II. AUTOMOBILES:

1) Basic customs duty on
new passenger cars and other motor vehicles (high end cars) with CIF value more
than US$ 40,000 and/or engine capacity exceeding 3000cc for petrol run vehicles
and exceeding 2500 cc for diesel run vehicles is being increased from 75% to
100%.

2) Basic customs duty on
motor cycle with engine capacity of 800cc or more is being increased from 60%
to 75%.

III. METALS:

1) Export duty is being
levied on ilmenite unprocessed at 10% and on ilmenite, upgraded at 5%.

2) Export duty is being
levied on bauxite at 10%.

3) Basic customs duty is
being reduced from 10% to 5% on stainless steel wire cloth stripe and from 7.5%
to 5% on wash coat for use in the manufacture of catalytic convertors and their
parts.

4) Full exemption from
export duty is being provided to galvanized steel sheets falling under certain
sub-headings, retrospectively w.e.f. 01.03.2011.

IV. PRECIOUS METALS:

1) Basic customs duty is
being reduced from 10% to 2% on pre-forms of precious and semi-precious stones.

V. CAPITAL
GOODS/INFRASTRUCTURE:

1) Basic customs duty on
steam coal is being increased from Nil to 2% and CVD from 1% to 2%.

2) Basic customs duty on
bituminous coal is being reduced from 5% to 2% and CVD from 6% to 2%.

3) Basic customs duty is
being reduced from 7.5% to 5% on 20 specified machinery for use in leather and
footwear industry.

VI. AIRCRAFTS &
SHIPS:

1) Basic Customs Duty on
yachts and motor boats is being increased from 10% to 25%.

2) Time limit for consumption
of imported goods by ship repair units is being extended from 3 months to 1
year.

3) Time period for
consumption/installation of parts and testing equipments imported for
maintenance, repair and overhaul (MRO) of aircrafts by units engaged in such activities
is being extended from 3 months to 1 year.

4) Presently, the basic
customs duty exemption is available to parts and testing equipments for
maintenance, repair and overhaul of aircrafts. This exemption is now being
extended to parts and testing equipments for maintenance, repair and overhaul
of aircrafts and parts thereof.

VII. ENVIRONMENT
PROTECTION:

1) Full exemption from
basic customs duty is being provided to lithium ion automotive battery for
manufacture of lithium ion battery packs for supply to the manufacturers of
hybrid and electric vehicles.

2) Time period of
exemption (Nil BCD, CVD of 6% and Nil SAD) for the specified parts of electric
and hybrid vehicles is being extended by 2 more years up to 31st March, 2015.

VIII. TEXTILES:

1) Basic customs duty on
raw silk (not thrown), of all grades is being increased from 5% to 15%.

2) Basic customs duty is
being reduced from 7.5% to 5% on textile machinery & parts.

IX.
ELECTRONICS/HARDWARE:

1) Basic customs duty on
Set Top Boxes for TV is being increased from 5% to 10%.

X. MISCELLANEOUS:

1) Full exemption from
basic customs duty and additional customs duty is being provided to trophy
imported by National Sports Federation recognized by the Department of Sports
and Youth Affairs or any Sports Body registered under Societies Registration
Act, in connection with any international tournament held in India.